How can I qualify for a commercial property loan?

On Behalf of | Oct 13, 2020 | Real Estate Transactions | 0 comments

If you are considering buying a piece of commercial property, you will want to understand the types of loans available and how you may qualify for the loan you need.

Value Penguin explains that the type of loan you will want to apply for may vary based on whether or not you intend to occupy some portion of the property with your own business.

Investment versus commercial loans

If you plan to rent all or the majority of the space included in a property you intend to purchase, you will want to apply for an investment loan given that would be the nature of your ownership interest.

If, however, you plan to have your own business occupy all or the majority of the space, you will want to apply for a commercial property loan.

Factors assessed by a commercial lender

As with any real estate loan, a commercial lender will evaluate the property and its general condition and value as part of your overall loan application. The personal finances of the business owners or partners may also be evaluated by a potential lender.

When it comes to reviewing the financials for a business, a lender will evaluate not only the general cash flow but the ability of the business to repay the annual loan costs relative to its annual net operating income.

This information is not intended to provide legal advice but is instead meant to give residents in Florida interested in purchasing a commercial property an overview of the factors assessed by lenders when reviewing commercial building loan applications.